It became a strategic haven for the British settlers of Carbonear fending off the raids by the French and became known for a time as the "Gibraltar of Newfoundland".

During the Battle of Carbonear the abandoned town was burned but, thanks partially to fortifications they had erected with their own funds, the earth works walls of which are still evident, the residents were successful in defending the island from capture.

After failing an attack on St. John's, he moved on to destroy every town in Conception and Trinity Bays, with the exception of Carbonear Island.

Carbonear Island continued to be an important refuge for settlers in the region during subsequent attacks from the French and later by American privateers until the early 19th century.

The first of a series of excavations began on the island in 2010 to learn more about its role in protecting British North America, and approximately 1300 artifacts were found in the first summer's dig.